Seems to be a healthy divergence of opinion on ET about this market. Two of the most popular recent threads have been "Dow Crashing " and "Market Has Bottomed" Well, seems we may be at an inflection point. So lets have our own Market Vane Sentiment Poll among ET's members. .
I think he means the September contract of the S&P futures, though that could be SP or ES (they're pretty close, anyway). My guess is that we'll move higher this week. The threads "Dow Crashing" and so on have given a good summary of some indicators pointing to a short-term bounce, among them the moderately high level of the VIX and high CBOE putcall ratio reading. Also, I just read this story under the "Motion Pictures" industry group on Lycos Finance News, so you know sentiment is pretty dismal. http://finance.lycos.com/home/news/story.asp?symbols=INDUSTRY:64&story=27594412 -v
But this week has nothing to do with whether the DOW is crashing or not ... or whether the market has bottomed or not ... we may very possibly go up this week ... but the DOW could still be crashing and the bottom could still be much lower ... no ?
if it's done right we could all be right! anyway I hope we do bounce cause mondays after bad fridays aren't always good to wake up to.
It's got to be the S&P 500 INDEX - which is what most people and their pets will be watching, and without which the futures contracts, after all, could not exist.
Here's some interesting commentary I came across this weekend.... Whenever the stock market closes lower on both Thursday and Friday of options expiration, it's a short-term danger sign for the first 1-2 days following expiration. Those of you who've been around for some time probably remember the '87 crash. What you may not remember is that the market was headed sharply lower during the week preceding the crash, and that the crash occurred on the day right after options expiration. Below is a list of all instances over the past fifteen years in which the S&P closed down on both Thursday and Friday of options expiration. Note that in the majority of cases, the S&P posted another lower close (below Friday's level) within two sessions... 06/21/02 - ??? 02/15/02 - Lower S&P close on Monday 09/21/01 - No lower close 06/15/01 - Lower S&P close on Monday 12/15/00 - Lower S&P close on Tuesday 09/15/00 - Lower S&P close on Monday 05/19/00 - Lower S&P close on Monday 02/18/00 - Lower S&P close on Thursday 01/21/00 - Lower S&P close on Monday 05/21/99 - Lower S&P close on Monday 08/21/98 - Lower S&P close on Thursday 06/19/98 - No lower close 05/15/98 - Lower S&P close on Monday 12/97/97 - Lower S&P close on Tuesday 10/17/97 - Lower S&P close on Friday 07/18/97 - Lower S&P close on Monday 02/21/97 - Lower S&P close on Thursday 02/16/96 - Lower S&P close on Monday 12/15/95 - Lower S&P close on Monday 08/18/95 - Lower S&P close on Monday 01/20/95 - Lower S&P close on Tuesday 11/18/94 - Lower S&P close on Monday 10/21/94 - Lower S&P close on Monday 04/15/94 - Lower S&P close on Monday 02/18/94 - Lower S&P close on Wednesday 09/17/93 - Lower S&P close on Monday 07/16/93 - Lower S&P close on Thursday 05/15/92 - No lower close 08/16/91 - Lower S&P close on Monday 04/19/91 - Lower S&P close on Monday 08/17/90 - Lower S&P close on Tuesday 04/20/90 - Lower S&P close on Tuesday 12/15/89 - Lower S&P close on Monday 08/19/88 - Lower S&P close on Monday 10/16/87 - Lower S&P close on Monday In 31 of the past 34 occurrences, or 91% of the time stretching back to 1987, the S&P has closed below Friday's level within one week. And in roughly 75% of the cases the S&P posted a lower close within two days, with the most likely day for a selloff being Monday.
IMO the market will be driven by earnings warnings/results over this week. There is already a lot of negative expectation priced in but more announcements about job layoffs etc would send the market down a hole, conversely, positive statements could do the opposite. In other words, I have no idea which way it will go, but my bias is up due to the extremes we are getting to.
Opinions mean nothing in the stock market. I checked with the psychic hotline to find out what is really going on. Futures will dip on the open, then start to rise 6 minutes into the market. Thats all I could afford at 3.95 per minute.